Additional bolt-on purchases of oil and gas assets in the Eagle Ford shale were disclosed by Ranger Oil Corporation, increasing the total purchase price of agreements inked in the second quarter to about $110 million, subject to normal adjustments. The combined all-cash transactions are scheduled to conclude on or around July 5 and are anticipated to be immediately accretive on all important financial measures.
Highlights:
- Transactions are largely composed of additional working interests in existing Ranger-operated wells along with contiguous producing assets and undeveloped acreage.
- Purchase price of each transaction at a discount to management's estimated Proved Developed PV-10 value(1). All cash consideration maximizes accretion to shareholders, while funding through free cash flow maintains Ranger's strong balance sheet.
- Transactions expected to add production of approximately 1,600 barrels of oil equivalent per day ("Boe/d") (~79% oil / 92% liquids), primarily associated with low-decline, legacy wells.
- Significant identified cost, marketing and operational synergies through efficient long lateral developments and the use of shared facilities and existing infrastructure.
- Ranger brought on-line a number of wells during the second quarter at initial production rates (IP24) greater than 2,500 barrels of oil per day ("Bbls/d") and 3,200 Boe/d including new company records exceeding 2,800 Bbls/d and 4,100 Boe/d.
- Given the accretive nature of the recent acquisitions and Ranger's strong organic performance, the Company plans to initiate a redetermination of its Borrowing Base.
- Pro-forma for the transactions, Ranger anticipates exiting the second quarter producing more than 30 MBbls/d and 42 MBoe/d. Overall for the second quarter, the Company expects to produce near the high-end of the previously announced guidance range.
- Darrin Henke, Ranger's President and CEO, said, "We are first-and-foremost focused on creating differential value for our shareholders through continually improving our existing operations, and I believe our recent record setting well results demonstrate the quality of Ranger's exceptional assets and team. We also plan to continue to relentlessly build long-term value for our shareholders through accretive transactions that are adding premium scale and increasing overall efficiencies. In the second quarter alone, we executed six ‘bolt-ons' in the Eagle Ford, demonstrating our ability to identify attractively-priced, strategic transactions where we can leverage our operational expertise to create significant synergies and optimize cash-on-cash returns. Behind our robust free cash flow profile and share repurchase program designed to return capital to shareholders, we've created significant cash flow accretion on a per share basis, while simultaneously decreasing our leverage ratio. In addition, we continue to actively evaluate additional acquisition opportunities in our core area of focus to further strengthen our high-margin portfolio."
